Policy Analysis and the Congress: an Organizational Study of the Congressional Budget Office

POLICY ANALYSIS AND THE CONGRESS: AN ORGANIZATIONAL STUDY OF THE CONGRESSIONAL BUDGET OFFICE by HARRY FRANCIS MINOR A.B., Universit of Detroit (1969) M.S.W., Brandeis University (1972) M.C.P., Massachusetts Institute of Technology (1975) SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY (SEPTEMBER 1978) ( Harry Francis Minor, 1978 IA Signature of Author Department of tUrban Studies and Planning, September 1978 Certified by Thesis Supervisor Accepted by /P'S Chairma, Department Committee ULBRARIES POLICY ANALYSIS AND THE CONGRESS: AN ORGANIZATIONAL STUDY OF THE CONGRESSIONAL BUDGET OFFICE by HARRY FRANCIS MINOR Submitted to the Department of Urban Studies and Planning on 17 August 1978 in partial fulfillment of the requirements for the Degree of Doctor of Philosophy ABSTRACT The Congressional Budget and Impoundment Control Act of 1974 enabled Congress, for the first time to take a comprehensive approach to the budget. The Act created two Budget Committees, one in the House and one in the Senate, as well as the Congressional Budget Office (CBO). At the time of its creation, CBO was thought to be one of the principal mechanisms for Congress to secure a more active role in budgetary control and the setting of national priorities, since CBO was conceived in part to provide Congress with the resources to assess the policy implications of the budget. This thesis presents an empirical analysis of CBO which focuses on two principal areas: assessing CBO's discrete impact on the balance of power through identifying the governing factors of that impact and determining the impact of CBO strategy on its ability to establish itself as a viable congressional support agency. The thesis first establishes the background for the 1974 Act by revisiting the budget process in its historical context. Second, it recreates the environment which directly created CBO by examining the legislative process which eventually resulted in the 1974 Act. Third, CBO is examined in terms of its organizational development. Fourth, CBO is assessed in terms of how it is viewed by its principal client, the Congress. Finally, the thesis examines CBO in the context of the balance of power and in its role as a congressional support agency. Thesis Supervisor: Donald A. Schon Ford Professor of Urban Affairs 2 TABLE OF CONTENTS CHAPTER 1 INTRODUCTION 4 RESEARCH METHODOLOGY 6 CHAPTER 2 THE BALANCE OF POWER 11 THE CONSTITUTION 13 POLITICAL PARTIES 21 THE CIVIL WAR 25 DEFICITS AND GOVERNMENT EFFICIENCY 28 THE DEPRESSION 46 WORLD WAR II 49 CHAPTER 3 THE ANTECEDENTS OF CBO 58 INFORMATION, IMPOUNDMENTS AND THE IMPERIAL PRESIDENCY 60 CHAPTER 4 THE DEVELOPMENT OF CBO 94 PURPOSE AND DUTIES 96 THE SELECTION OF A DIRECTOR 99 STRATEGY 106 CHAPTER 5 CONGRESSIONAL ASSESSMENTS OF CBO 121 SENATE 123 HOUSE 127 NATIONAL JOURNAL 131 CHAPTER 6 CONCLUSIONS 133 FINDINGS 135 SUMMARY 163 NOTES APPENDICES APPENDIX A: THE FLOOR ACTION 189 APPENDIX B: THE LAW 211 APPENDIX C: TASKS OF CBO 222 BIBLIOGRAPHY 227 3 CHAPTER 1 INTRODUCTION 4 Confronted with the vast array of figures in the Budget of the United States, one is likely to think of budgeting -as an arid subject, the province of stodgy clerks and duZZ statisticians. Nothing couZd be more mistaken. Human nature is never more evident than when men are struggling to gain a larger share of funds or to apportion what they have among myriad claimants. Budgeting deals with the purposes of men. How can they be moved to cooperate? How can their conflicts be resolved? How can they find ways of dealing effectively with recalcitrantproblems? Serving diverse purposes, a budget can be many things: a political act, a plan of work, a prediction, a source of enlightenment, a means of obfuscation, a mechanism of control, an escape from restrictions, a means to action, a brake on progress, even a prayer that the powers that be wiZZ deal gently with the best aspirations of faZZible men. Aaron Wildavsky 5 RESEARCH METHODOLOGY Four years ago, the 93rd Congress passed the "Congressional Budget and Impoundment Control Act of 1974." (See Appendix B) Until that time, Congress took formal action on the budget only in piecemeal fashion. The Act requires that Congress take a comprehensive look at the budget, specifi- cally: budget authority, outlays, revenues, and any resulting deficit. The Act called for the appointment of two Budget Committees, one in the House and one in the Senate, and gave them the central role in developing and managing the congressional budget process. The 1974 Act can be viewed as the most recent episode in a continuing battle between the Congress and the Executive for the Power of the Purse. The new budget process works as follows: After receiving the President's budget in January, the Senate and House Budget Committees receive reports from the other principal committees in their respective houses, setting forth their views as to budget authority, outlays, and revenues within their own jurisdictions. By 15 April, the calendar calls on each budget committee to submit to its respective house a budget resolution that not only recommends budget totals, but also sets targets for outlays for each of the 16 major functional categories into which the Federal budget is presently divided. This resolution is to be based on the relative implications of alternative fiscal policies (including the President's proposed budget). By 15 May, a 6 first concurrent budget resolution is to be worked out and accepted by both the House and Senate. Between that date and early September, the various authorizing, appropriations, and revenue committees proceed to take action on individual bills. The Act also created the Congressional Budget Office (CBO) as the fourth support agency to the Congress, the others being the General Accounting Office (GAO), the Congressional Research Service (CRS), and the Office of Technology Assess- ment (OTA). At the time of its creation, it was thought that CBO would be one of the principal mechanisms for Congress' attempt to have a more active role in the setting of national priorities. My purpose was to conduct an empirical analysis of the Congressional Budget Office from the point of view of the balance of power and control between the legislative and executive branches of government, where the budget is seen as a key element in that process. My inquiry is an organizational study of the sort which takes a large part of its direction from the literature on the balance of power and from Sarason's important work, The Creation of Settings. My inquiry focuses on two principal areas: o Discovering whether the Congressional Budget Office had a discrete impact on the balance of power, and what were the governing factors of that impact. 7 o Determining the impact of CBO strategy on its ability to establish itself as a viable congressional support agency. The scope of the inquiry -did not include an evalua- tion of the new budget process, or either of the two budget committees, all of which were mandated by the same act which created CBO. Nor have I attempted a comprehensive survey of CBO's users. (Two such surveys have recently been completed and are discussed briefly in Chapter 5.) My intention was to try to place the birth of this new organization in a broad historical context, in an effort to uncover those forces which account for there being a Congressional Budget Office, as well as what its real signifi- cance is. Since the great bulk of the information concerning the birth of CBO resides in the personal notes and memories of living people, my principal sources of data, in addition to examining various committee prints and draft documents, were past and present staff members of CBO, as well as past and present staff of other relevant organizations such as the Senate Budget Committee, the House Budget Committee, the Joint Study Committee on Budget Control, the Senate Government Operations Committee, the Senate Rules Committee, the House Rules Committee, the General Accounting Office, the Congres- sional Reference Service, the Brookings Institution, and the National Journal. 8 My primary vehicle for gathering data was structured interviews with more than 40 of the key actors involved in fashioning the legislation which created CBO, designing and setting up the organization, or interacting with CBO in the course of their work. My intention was to work my way from the outside in and from the bottom to the top; i.e., to start with the drafters of the law, move to the founding group (the implementers), then on to those in the Congress who interact with CBO on a day-to-day basis. In some instances, it was necessary to quote people by position rather than by name. This was done in an effort to be sensitive to individual reputations and professional relationships of long standing. This anonymity resulted in a candor and comprehensiveness which would not have been forthcoming otherwise. In order to avoid introducing bias into the findings, the interviewing consisted of recording voluntary responses to a series of basic questions, including the following: o Can you tell me a little about your background before your present position? o Why did you come here? o What were your expectations with respect to CBO? o What were the organizational antecedents for CBO? o In what principal ways does CBO differ from the other three congressional support agencies? o What were the principal obstacles that CBO faces? o How did you come to know them? o What was CBO's response

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